Correlation Between HYDROFARM HLD and Haverty Furniture
Can any of the company-specific risk be diversified away by investing in both HYDROFARM HLD and Haverty Furniture at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining HYDROFARM HLD and Haverty Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HYDROFARM HLD GRP and Haverty Furniture Companies, you can compare the effects of market volatilities on HYDROFARM HLD and Haverty Furniture and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in HYDROFARM HLD with a short position of Haverty Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of HYDROFARM HLD and Haverty Furniture.
Diversification Opportunities for HYDROFARM HLD and Haverty Furniture
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HYDROFARM and Haverty is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding HYDROFARM HLD GRP and Haverty Furniture Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haverty Furniture and HYDROFARM HLD is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on HYDROFARM HLD GRP are associated (or correlated) with Haverty Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haverty Furniture has no effect on the direction of HYDROFARM HLD i.e., HYDROFARM HLD and Haverty Furniture go up and down completely randomly.
Pair Corralation between HYDROFARM HLD and Haverty Furniture
Assuming the 90 days trading horizon HYDROFARM HLD GRP is expected to generate 2.77 times more return on investment than Haverty Furniture. However, HYDROFARM HLD is 2.77 times more volatile than Haverty Furniture Companies. It trades about 0.19 of its potential returns per unit of risk. Haverty Furniture Companies is currently generating about 0.1 per unit of risk. If you would invest 52.00 in HYDROFARM HLD GRP on September 13, 2024 and sell it today you would earn a total of 12.00 from holding HYDROFARM HLD GRP or generate 23.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HYDROFARM HLD GRP vs. Haverty Furniture Companies
Performance |
| Timeline |
| HYDROFARM HLD GRP |
| Haverty Furniture |
HYDROFARM HLD and Haverty Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HYDROFARM HLD and Haverty Furniture
The main advantage of trading using opposite HYDROFARM HLD and Haverty Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HYDROFARM HLD position performs unexpectedly, Haverty Furniture can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Haverty Furniture will offset losses from the drop in Haverty Furniture's long position.| HYDROFARM HLD vs. AB Volvo | HYDROFARM HLD vs. Daimler Truck Holding | HYDROFARM HLD vs. Superior Plus Corp | HYDROFARM HLD vs. SIVERS SEMICONDUCTORS AB |
| Haverty Furniture vs. Lowes Companies | Haverty Furniture vs. Superior Plus Corp | Haverty Furniture vs. SIVERS SEMICONDUCTORS AB | Haverty Furniture vs. NorAm Drilling AS |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |